Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: LLCF who wrote (32622)	10/31/2000 12:44:17 PM
From: Oblomov	Read Replies (1) \| Respond to of 436258

DAK, October is the last month of the Fiscal Year for many mutual funds, but definitely not all. I am not certain of the reason for a Nov-Oct Fiscal Year.

To: LLCF who wrote (32622)	10/31/2000 12:55:05 PM
From: IceShark	Respond to of 436258

David, it is an investment myth promulgated by CNBS, though there are reasons for it. As best as I have been able to determine it arises from two things. Quite a few funds have a 10-31 fiscal year, so that is when their books close and everything flows down to shareholders. This prompts all final house cleaning. Second, for those funds that have a 12-31 year end, they usually have their Board of Directors meeting about now to review the year's performance and how they plan on closing out the year. So actions to wind up the year start to occur now. Nothing magic, though CNBS would certainly have you believe so.

To: LLCF who wrote (32622)	10/31/2000 1:53:45 PM
From: The Duke of URL©	Read Replies (1) \| Respond to of 436258

L: Wasupwitdat anyway.... why can't an institution sell in Nov and take a tax loss??? Is it just mutual funds or all institutions. I never understood that. Certainly individuals can sell in Nov and take a tax loss?? Why not other entities? I just noodling here, but prior to the Tax Reform Act of 1986, you could adopt any fiscal year you wanted for a trust, which is what a mutual fund is. So the older bigger funds would have chosen September or October. But typically even then the easiest way to do it accounting wise was to close on the calendar quarter, so September was chosen a lot. Now you must elect the year of the majority of your beneficiaries, which is the calendar year end; unless you get special permission or do some tricky stuff. IN ANY EVENT, all report to the market on the Calendar quarter. That is when window dressing appears. That is when tax loss is incurred for the year. Now, you can't buy back DURING October, because of the 31 day rule. (Oh, you can, but you loose the tax loss, and some funds really don't care about their beneficiary's tax picture.) Now that's 31 days from the time the fund sold, so if they are really smart, and are going to do this, they sell early, so that they can buy back in the Middle of October, but they are not "really smart". So October sputters its way into November, every year.